After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT).
Is RCKT a good stock to buy now? Hedge fund interest in Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that RCKT isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare RCKT to other stocks including Avaya Holdings Corp. (NYSE:AVYA), The Cheesecake Factory Incorporated (NASDAQ:CAKE), and Kadant Inc. (NYSE:KAI) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are plenty of signals shareholders have at their disposal to value publicly traded companies. Some of the best signals are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the top investment managers can outperform their index-focused peers by a very impressive margin (see the details here).
Joseph Edelman of Perceptive Advisors
Joseph Edelman of Perceptive Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let's analyze the latest hedge fund action surrounding Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT).
Do Hedge Funds Think RCKT Is A Good Stock To Buy Now?
At third quarter's end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards RCKT over the last 21 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) was held by Tang Capital Management, which reported holding $67.8 million worth of stock at the end of September. It was followed by Perceptive Advisors with a $50 million position. Other investors bullish on the company included Cormorant Asset Management, Citadel Investment Group, and Vivo Capital. In terms of the portfolio weights assigned to each position Tang Capital Management allocated the biggest weight to Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT), around 12.27% of its 13F portfolio. Ghost Tree Capital is also relatively very bullish on the stock, earmarking 2.64 percent of its 13F equity portfolio to RCKT.
Due to the fact that Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) has faced falling interest from the aggregate hedge fund industry, logic holds that there exists a select few fund managers who sold off their full holdings heading into Q4. It's worth mentioning that Arsani William's Logos Capital sold off the largest stake of all the hedgies tracked by Insider Monkey, comprising close to $3.1 million in stock. James E. Flynn's fund, Deerfield Management, also dumped its stock, about $1.1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) but similarly valued. We will take a look at Avaya Holdings Corp. (NYSE:AVYA), The Cheesecake Factory Incorporated (NASDAQ:CAKE), Kadant Inc. (NYSE:KAI), Trillium Therapeutics Inc. (NASDAQ:TRIL), First Merchants Corporation (NASDAQ:FRME), Alexander's, Inc. (NYSE:ALX), and Seabridge Gold, Inc. (NYSE:SA). This group of stocks' market values are closest to RCKT's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AVYA,34,359154,0 CAKE,25,151806,8 KAI,8,64381,3 TRIL,32,464628,7 FRME,15,65819,4 ALX,10,99516,2 SA,10,68702,2 Average,19.1,182001,3.7 [/table]
As you can see these stocks had an average of 19.1 hedge funds with bullish positions and the average amount invested in these stocks was $182 million. That figure was $240 million in RCKT's case. Avaya Holdings Corp. (NYSE:AVYA) is the most popular stock in this table. On the other hand Kadant Inc. (NYSE:KAI) is the least popular one with only 8 bullish hedge fund positions. Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RCKT is 53.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on RCKT as the stock returned 145.3% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
